Diebold provides software services that connect people around the world with their money in a secure, convenient manner. The firm has two core revenue streams: financial self service, which offers ATM outsourcing, ATM security, deposit automation, recycling and payment terminals, and other capabilities; and security solutions, including facility products such as pneumatic tube systems for drive-up lanes, barrier solutions such as vaults and depositories, and electronic security solutions with remote monitoring, intrusion protection, and fire detection capabilities. Roughly half of the firm's revenue is generated in the United States, with the rest coming from Brazil, China, and other countries.

Diebold Nixdorf (NYSE:DBD) is the second largest maker of automatic teller (ATM) machines worldwide following its merger with Wincor Nixdorf last year. Unfortunately, the quarter began with the announcement of a large cut to 2017 fiscal year guidance where revenue was reduced by $300 million and EBITDA by $90 million. Competitor NCR was very successful in taking market share via aggressive pricing during the extended period to close the merger. The share gains had a large negative impact to NCR’s margins, and as a result NCR has now become more rational in its product pricing. We believe that this has led to a more stable environment where Diebold is starting to win back its lost market share. In support of this contention, backlog is rebuilding post a tough second half of 2016 and changes have been made in the Services segment which should lead to better results going forward. We believe that Diebold will be able gain scale and reduce duplicative costs while expanding the footprint of its strong service offering. Read more...

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